If Islamic banks cannot be an ease to the ummah, there’s no reason for its existence. If charging compounding interest is considered zalim (discriminatory), the act of filing a default for bankruptcy without helping the borrowers can be considered as zalim too. In Surah Al Baqarah verse 280, Allah swt reminded the lenders to give more time to borrowers who are having difficult times to make payments and even remit the loans as sadaqah (charity).

Surah Al Baqarah, verse 280:

“If the debtor is in a difficulty, grant him time Till it is easy for him to repay. But if ye remit it by way of charity, that is best for you if ye only knew.” (Translation by Yusuf Ali)

While I see Islamic banks/scholars are very critical about riba’ (usury) financing, they are not critically the same in this matter. A borrower being filed for bankruptcy will have difficulty in his/her life. Hence the Islamic banking system can be a real changer and different from the conventionals (so far the perception of Islamic banking as the “shadow” of the conventional banks has not abated) if it has its own unit of managing and helping borrowers who are having problems. This unit can help the troubled borrowers to restructure their loans and in some cases the loans can be remitted. This is what I mean “being an ease to the ummah.” Of course not every non-performing loan can be qualified to be remitted. There must be a risk evaluation on this. But I am positive that it can give a good impact to the Islamic banking system, economy and ummah as a whole. Bear in mind that Islamic banking should not move away from one of the main Islamic values i.e. being just. If the system is discriminatory, then it’s not Islamic. This way, the Muslims and even non-Muslims know that they can depend on the Islamic banks when they are having difficult times. Islamic banks should not follow the predatory practices of the conventional banks when it comes to loan defaults.

Another aspect of Islamic banking that I would like to comment is the Syariah council (Islamic scholars hired by banks to oversee the compliance of financial products according to the Islamic law). In my humble opinion syariah council should not be paid by the bankers. I see this as a conflict of interest. I’m not implying that syariah councils hired by banks cannot be trusted. They are very knowledgable people in Syariah. But humans are humans. They should be hired by the regulators aka Bank Negara (the Central Bank) or become a free governing body. Any application for Islamic banking license or product must go through them. This will keep the system clean from fitnah and any wrong doings in the future, at the same time maintaining consistent practices.

In the future, I am praying that there will be Syariah councils which consists of people who are experts in both field of mathematical finance/banking and Syariah. Some colleges which are offering the Islamic banking/finance courses hopefully are having this in mind. Such council with two fields in mind can orchestrate the creation of new banking products and risk management system which would not be the “immitation” or mirror of the conventional banking system.

I am not against the Islamic banking system. I love that Islamic banking is free from speculating activities. Conventional banking system has become a paper money casino, which contribute to the instability of the current financial system. There are rooms for the Islamic banking system to improve.

In the end we must all know that this system is standing on a system that I considered non-Islamic – the fractional reserve banking system and paper money system. I do not know if Islamic banks can survive in a 100% reserve banking system (how much deposit you have is how much you lend). In the Quran, money is dinar & dirham. Gold & silver must be mined and cannot be manipulated like paper money (can be manipulated by debasing them, but in the past anyone who tried to debase them get a very serious penalty). Paper money is the mother of inflation. More and more money circulating in the economy means inflation. It erodes purchasing power. So in order to retain its purchasing power, savings must be given interest rates/profit returns. If not, money sitting in the banking system will lose its value as prices of goods & services rise due to inflation. Normally, no one would want to save. But in this era of low rates, people are not looking at rates anymore but putting money in a bank has become about convenience rather than seeking investment income. But until the faltering modern financial system goes, we have to operate within the system.

I am still learning and my opinions are solely mine. Allah swt knows best and may He show us the straight path. Please feel free to drop your comments below.

What is the “Grexit”? It’s the inevitable Greece exit out of the Euro zone. Greece should have exited the European Union last year. But the politicians kow-tow to the demands of the EU leaders, its fascist European Central Bank and the mafia IMF. Now Greece is going to be abandoned like an unwanted child. Billions of Euros being shovelled and dumped on Greek banks did not have any effect on the country’s economy. I wonder who are these economics geniuses who think that a debt problem this huge can be solved with more debt.

But it’s a good thing that Greece exits EU. It will have its sovereignty back and the ability to shape & mold its own economic policy, tailored to the aspirations of the Greek people, rather than to the demands of the EU leaders. The most important of all is that Greece will have control over its currency again. M.A Rothschild famously said “Give me control over a nations currency, and I care not who makes its laws.” Very true, especially coming from someone whose lineage is full of currency controllers.

Some might be sceptical that Greece will not and will not be allowed to exit the Euro zone, but evidences show that wealthy individuals, financial institutions & corporations are channelling their money out to safer places. CNBC reported that wealthy savers in Greece & Spain have started to wire transfer their money to safer places such as Geneva, London & Frankfurt, which could lead to “wire-transfer bank run”. Law firms in London are advising honestly to their worrying clients that they should take their investments out of Greece and prepare to take a short term hit. Companies as big as GlaxoSmithKline said that they don’t leave any cash in Greece & most European countries.

But the real question is what will happen when Greece exits the Euro? I first say “Good luck Greece! Enjoy your new freedom!” (and enjoy it responsibly). To the rest of the Europe, the end has just started. Spain, Portugal, Italy, Cyprus, Ireland, etc are waiting in line to get the Euro “paper-toilet” money from ECB. Then they will realize that all debts they get from ECB are worthless in order to solve their problems, including the advices on austerity measures.

So then maybe all of the countries mentioned above will exit EU? That depends on whether their leaders are owned by the ECB & IMF. I will not reject altogether a surprise plan (maybe,there’s no evidence to this,but New World Order,remember?) to integrate all countries in the EU as one nation, with one currency. This might be a few years into the future after the exits of a few countries, especially when the countries exited realized that they cannot compete on their own unless they resort to something such as paying min wages like what China is doing (to keep cost down & remain competitive). Pure speculation of mine, but nevertheless something to ponder.

To this very moment, no one has been able to gauge how much the ripple effect the world will get from the Grexit. Looking into a dark hole where you cannot see the bottom is pretty scary. Europe is that bottomless pit now, and no one is willing to jump into it.

You have the worst quality of life in the developed world – by a wide margin.

If you had any idea of how people really lived in Western Europe, Australia, New Zealand, Canada and many parts of Asia, you’d be rioting in the streets calling for a better life. In fact, the average Australian or Singaporean taxi driver has a much better standard of living than the typical American white-collar worker.

I know this because I am an American, and I escaped from the prison you call home.

I have lived all around the world, in wealthy countries and poor ones, and there is only one country I would never consider living in again: The United States of America. The mere thought of it fills me with dread.

Consider this: you are the only people in the developed world without a single-payer health system. Everyone in Western Europe, Japan, Canada, Australia, Singapore and New Zealand has a single-payer system. If they get sick, they can devote all their energies to getting well. If you get sick, you have to battle two things at once: your illness and the fear of financial ruin. Millions of Americans go bankrupt every year due to medical bills, and tens of thousands die each year because they have no insurance or insufficient insurance. And don’t believe for a second that rot about America having the world’s best medical care or the shortest waiting lists: I’ve been to hospitals in Australia, New Zealand, Europe, Singapore, and Thailand, and every one was better than the “good” hospital I used to go to back home. The waits were shorter, the facilities more comfortable, and the doctors just as good.

This is ironic, because you need a good health system more than anyone else in the world. Why? Because your lifestyle is almost designed to make you sick.

Let’s start with your diet: Much of the beef you eat has been exposed to fecal matter in processing. Your chicken is contaminated with salmonella. Your stock animals and poultry are pumped full of growth hormones and antibiotics. In most other countries, the government would act to protect consumers from this sort of thing; in the United States, the government is bought off by industry to prevent any effective regulations or inspections. In a few years, the majority of all the produce for sale in the United States will be from genetically modified crops, thanks to the cozy relationship between Monsanto Corporation and the United States government. Worse still, due to the vast quantities of high-fructose corn syrup Americans consume, fully one-third of children born in the United States today will be diagnosed with Type 2 diabetes at some point in their lives.

Of course, it’s not just the food that’s killing you, it’s the drugs. If you show any sign of life when you’re young, they’ll put you on Ritalin. Then, when you get old enough to take a good look around, you’ll get depressed, so they’ll give you Prozac. If you’re a man, this will render you chemically impotent, so you’ll need Viagra to get it up. Meanwhile, your steady diet of trans-fat-laden food is guaranteed to give you high cholesterol, so you’ll get a prescription for Lipitor. Finally, at the end of the day, you’ll lay awake at night worrying about losing your health plan, so you’ll need Lunesta to go to sleep.

With a diet guaranteed to make you sick and a health system designed to make sure you stay that way, what you really need is a long vacation somewhere. Unfortunately, you probably can’t take one. I’ll let you in on little secret: if you go to the beaches of Thailand, the mountains of Nepal, or the coral reefs of Australia, you’ll probably be the only American in sight. And you’ll be surrounded crowds of happy Germans, French, Italians, Israelis, Scandinavians and wealthy Asians. Why? Because they’re paid well enough to afford to visit these places AND they can take vacations long enough to do so. Even if you could scrape together enough money to go to one of these incredible places, by the time you recovered from your jetlag, it would time to get on a plane and rush back to your job.

If you think I’m making this up, check the stats on average annual vacation days by country:

Finland: 44
Italy: 42
France: 39
Germany: 35
UK: 25
Japan: 18
USA: 12

The fact is, they work you like dogs in the United States. This should come as no surprise: the United States never got away from the plantation/sweat shop labor model and any real labor movement was brutally suppressed. Unless you happen to be a member of the ownership class, your options are pretty much limited to barely surviving on service-sector wages or playing musical chairs for a spot in a cubicle (a spot that will be outsourced to India next week anyway). The very best you can hope for is to get a professional degree and then milk the system for a slice of the middle-class pie. And even those who claw their way into the middle class are but one illness or job loss away from poverty. Your jobs aren’t secure. Your company has no loyalty to you. They’ll play you off against your coworkers for as long as it suits them, then they’ll get rid of you.

Of course, you don’t have any choice in the matter: the system is designed this way. In most countries in the developed world, higher education is either free or heavily subsidized; in the United States, a university degree can set you back over US$100,000. Thus, you enter the working world with a crushing debt. Forget about taking a year off to travel the world and find yourself – you’ve got to start working or watch your credit rating plummet.

If you’re “lucky,” you might even land a job good enough to qualify you for a home loan. And then you’ll spend half your working life just paying the interest on the loan – welcome to the world of American debt slavery. America has the illusion of great wealth because there’s a lot of “stuff” around, but who really owns it? In real terms, the average American is poorer than the poorest ghetto dweller in Manila, because at least they have no debts. If they want to pack up and leave, they can; if you want to leave, you can’t, because you’ve got debts to pay.

All this begs the question: Why would anyone put up with this? Ask any American and you’ll get the same answer: because America is the freest country on earth. If you believe this, I’ve got some more bad news for you: America is actually among the least free countries on earth. Your piss is tested, your emails and phone calls are monitored, your medical records are gathered, and you are never more than one stray comment away from writhing on the ground with two Taser prongs in your ass.

For the last 30 years we have went through the roller coaster of the world economy; 1973-1974 stock market crash combined with the oil crisis resulted from the Yum Kippur War; 1980s economic crisis because of the loan and savings institutions failures in the US; 1997 Asian financial crisis that crippled the growth of most of the “Asian Tiger” countries; 2000 dot-com bubble and I am sure not the last one neither the least one is the sub-prime crisis which affected the economic growth of every country in the world. The question is what’s next in store?

The answer to the question above can be answered if we look carefully at the US economy. With its deficit of $1.42 trillion and a soaring national debt of $12.4 trillion (an approximation; too many digits to put all), I think an American citizen can look at this number the same way he look at the Empire State building; with utter astonishment. The recent stimulus and bail-out to various investment banks and insurance companies added up to this mountainous debt. I see this as irreversible. Because of this enormous debt which mostly incurred from borrowing from other countries for example China, the bulk of US dollars are outside the US, making the country vulnerable to its own currency if the dollar collapse (decline severely in value). But how is this possible?

To someone who never had an economic course, get ready for Economics 101 (smiley). As we all know, the price of anything in this world is affected by its demand and supply. If demand is static, an increase in supply will lower the price of a certain product and vice versa. The same goes if the supply is static, the increase in demand will increase the price of a certain product and vice versa. To sound more academic, we say that demand and supply have an inverse relationship.

Before I go on, another thing you need to know is about bond. A bond is a debt instrument, in which the issuer (in this case the US govt) owes the bond holder (countries which buy the bonds) the amount of money stated on the bond, and is obliged to pay interest to the bond holder and pay the full amount owed at the end of the bond’s term. Currently, China is the highest holder of the US bonds, a total of $727 billion, making the country as the top creditor to the US. The value of bonds that has been issued by the US is about $3 trillion, as at Dec 2009. So what?

Imagine China dumping (selling) half of its bond holding and its US dollar bills (the real US dollar,not bonds) to the world market. This will create an influx of US dollars and hence increase the supply of it. As we learned in the previous two paragraphs, when the demand of the US dollar remained relatively static and the supply increase, this will lower the value of the US dollar. Other countries which are holding the US bonds and dollars as their reserves will also dump their dollars that they have, being afraid that their holding value will fall if they don’t dump as quickly as possible. The result will be the vertical fall of the US dollar in a day or two and hence another crisis for the world to suffer. Arrggh..not again. What will happen then?

The world stock market and foreign exchange market will crash severely. People (Americans) will be panic knowing that their money that they saved as well as in their wallet can’t even buy a dozen of eggs. People will loot supermarkets and there will be civil disturbances and the state of emergency. God knows what will happen. All world trades in the US dollar will put to a halt and the leaders of the world will meet to resolve the issue. This is the time for the New World Order propagandists to put forward their idea of one world currency. When there is no apparent choice, the world will succumb to this proposal.

Most economists does not question will or will not the US dollar will collapse, but when will it collapse. US will not be able to sustain its current spending, and sooner or later has to admit that it can no longer service its debt. It can result to printing money but printing money will result in the increase in the money supply without the backing of production. When will this happen? Soon I guess. Will it happen? Absolutely. Be prepared of this unthinkable crisis.